The Argentine government has finalized the policy for the
development of renewable energies within the country. Decree 531,
completed on 30 March, establishes the mechanisms needed to achieve the
renewable energy goals of 8% in 2017 and 20% in 2025.

One of the main points within the Decree is the creation of
a trust fund for renewable energy, the Fund for the Development of Renewable
Energies (Fondo para el Desarrollo de las Energias Renovables). The decree
states that 12,000 million pesos (US$819 million) will be added to the fund
this year.

The annual amount within the fund will never be less than
50% of the saving achieved on fossil fuels that were achieved with renewable
energies from the year before. The Argentine electrical grid currently has a high
dependence on fossil fuels.

To calculate the amount that will be put within the fund, it
will take into account the renewable energy targets that are met.

Another issue in question is the purchase mechanisms for
those with renewable energy obligations: by private contract, by
self-generation or cogeneration, or by partaking in a joint procurement
mechanism from the Management Company of the Wholesale Electricity Market
Anonymous Society (Compañía Administradora del Mercado Mayorista Eléctrico
Sociedad Anónima) or from an entity designated by the authority.

It also details related issues for the bidding of renewable
energies. The Decree outlines the possibility of having quotas for technology
within the bids. Another relevant point is that the price “could be
established” in U.S. dollars rather than in Argentine pesos.

On the other hand, the Decree established more favorable
conditions for the projects that use more national components. Instruments are
also provided to encourage local production of components for renewable energy
projects.

The goals of 8% renewable energy in 2017 and 20% in 2025 are
covered by the law 27191 that was adopted with broad support in Argentine
parliament under the previous government. President Mauricio Macri’s new
government, who came into office last December, goes one step further in the
promotion of renewable energies with the publication of Decree 531.

Argentina has a high dependence on fossil fuels in its
electricity grid and the development of renewable energies within the country
is still very low. According to the Fundelec organization, solar and wind
energy represented just 0.2% of the total electricity generated last year.